Question about finish the basement

[Wen Chuang]

Anyone here specialized in San Francisco rental market?

My mother-in-law has a house which she is considering to rent it out. The house is about 1400 sqft and is close to public transportation. The main level has 3 (small) br and 1 bath. Currently the basement has one bonus room and one half bath, and a two cars tandem garage. She is considering to finish the basement so that it would create one more living room, two bedrooms, and one full bath (will be losing one car parking space in the garage). This project will add about 550 sqft of extra living space. We asked a contractor, and the estimated cost is about 100K for such project.

My question is that, if she go ahead with such remodel project, who much more rent can be generated? The current zillow "Rent Zestimate" for this house is about $4200/mo. If she finish up the garage (which will increase the property value thus higher property tax), let's say maybe the rent can be increased to, say, $5500/mo. Would that $1300 rent increase justify such remodel project? Thoughts or comments? Thanks!

[Frank Chin]

Our family own properties in San Francisco, and my brother in law has a house as you described. Hard to believe they go for over a million.

Do you plan to make it legal, and getting a C/O. In NY, where I'm more familiar with zoning, its hard to get a CO converting a SFR to a 2 family. And in CA, due to a court case, Gruzen v. Henry, you will have problems collecting rent if people don't pay.

In NY, units without C/O's are common, but it causes issues in evictions, and people can turn you in to authorities.